Cross border insolvencies and financial restructurings are remarkably opaque considering we live in the Information Age. The mission of the Centre of Main Interest (the COMI) is to light some candles in the darkness and create a forum for further discussion. The Law Offices of Tally M. Wiener, Esq. are pleased to publish the COMI blog.
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Sunday, November 24, 2013

Fisker Automotive has
filed for Chapter 11 bankruptcy protection, a move that's appeared all
but inevitable since its Karma electric sports car failed both in tests and on the market. The filing comes alongside Fisker's decision to sell nearly all of its assets to Hybrid Technology, an investor group that Reuters reports
will have the automaker restore production of the Karma and begin
development of new vehicles. The Karma has reportedly been out of
production for around 18 months now, following its flop at launch: only 2,000 cars were shipped, one caught fire, and another broke down in myriad ways during a Consumer Reports' road test.

Fisker's sale is major loss for
the Department of Energy, which had issued the automaker $192 million
in loans to but will only receive $25 million back from Hybrid, reports
Reuters. In all, the DOE will only recoup around $53 million of its
investment. Fisker had actually won a far larger loan of $529 million,
but its credit line was frozen in 2011 after missing performance
milestones.

In April, Fisker fired three-quarters of its workforce
to conserve cash while looking for a buyer and trying to avoid a
bankruptcy filing. Ultimately, it "We believe the sale to Hybrid and the
related Chapter 11 process is the best alternative for maximizing
Fisker Automotive's value for the benefit of all stakeholders," Marc
Beilinson, Fisker Automotive's chief restructuring officer, said in a
statement yesterday. Beilinson says Fisker plans to "remain a guiding
force" in the auto industry, though there's no timeline yet on when its
research and production will get back on track.